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Thread: Forget the gas tax - a driving tax may be next (CNNMoney)

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    Forget the gas tax - a driving tax may be next (CNNMoney)

    [QUOTE]Forget the gas tax - a driving tax may be next

    By Steve Hargreaves @CNNMoney May 18, 2011: 7:49 AM ET

    NEW YORK (CNNMoney) -- Washington lawmakers are kicking around a new idea to help raise funds to fix our highways and infrastructure: a national driving tax charging motorists by the mile.

    A driving tax could either replace the current 18.4 cent a gallon federal gas tax or, possibly, add to it.

    Because greater fuel economy is letting motorists drive more miles using less gas, the current gas tax that funds the federal government's efforts to build and maintain highways isn't generating enough money.

    A driving tax, officially known as a "vehicle miles traveled" tax, could close that gap.

    While many see a driving tax as more efficient than the gas tax, there are privacy concerns over how driving information would be collected. Plus, lawmakers opposed to the idea say it places a heavier burden on motorists from rural states.

    "It's a true user tax," said Ken Orski, publisher of the infrastructure industry publication Innovation NewsBriefs and a former transportation official in the Nixon and Ford administrations. "But there are serious political problems with this proposal."

    Although there's currently no bill proposing such a tax, lawmakers are looking into it.

    Earlier this year, North Dakota Democrat and Senate Budget Committee Chairman Kent Conrad asked the Congressional Budget Office to study the idea. In March CBO issued a report that said such a tax was feasible and had many advantages over a gas tax.

    "Because highway costs are more directly determined by miles driven than by fuel used, appropriately designed [mileage] taxes can do more to improve the efficiency of road use than fuel taxes can," the report said.

    The CBO report came on the heels of two congressional commissions that recommended implementing such a tax, said Orski.

    Last week, the publication The Hill reported that draft transportation legislation from the Obama administration included the driving tax, although administration officials told the paper that it was just an idea and was not supported by the president.

    The White House did not respond to a request for comment by CNNMoney.

    The state of Oregon is currently conducting a pilot program to evaluate the idea.

    Still, with motorists already paying near record gas prices, the driving tax could be a tough sell.

    How much it might cost: The cost to drivers would depend on how much money the government wanted to raise. To maintain the current collection level of about $35 billion a year, the tax would be just under a penny a mile for an average passenger car, said Orski.

    That would cost the average driver of a Toyota Camry, which gets about 380 miles per tank of gas, about $3.40 per fill up -- roughly the same as the current gas tax.

    But it could also be quite a bit higher.

    The $35 billion or so generated each year from the federal gas tax hasn't been enough to cover all the nation's road needs. Between 2008 and 2010 the federal government had to supplement the Highway Trust Fund by an additional $30 billion, according to the CBO report.

    So it stands to reason that if a driving tax replaced the gas tax, it might be two or three cents a mile as opposed to under a penny. Or the driving tax could be collected in addition to the gas tax.

    Conversely, road spending could be cut, as some Republicans are proposing.

    Pros and cons: The driving tax could be collected by mail following an electronic reading of a vehicle's odometer at the gas station. It could also be tabulated using on-board GPS technology that records mileage driven.

    The driving tax is seen as a more precise way to charge motorists for road use.

    While the gas tax is an approximate measure of how much wear and tear a vehicle puts on the roads, with heavier vehicles generally using more gas and so paying more taxes, the mileage tax could be based on a specific vehicle's make, year and model.

    A triple-axle truck, for example, causes less road damage than a double-axle truck of the same weight because the weight is more evenly distributed. So the triple axle would be charged less.

    Adding GPS technology enables a whole other level of pricing. Motorists could be charged different rates for travel on different roads during different times of the day. This is a form of congestion pricing, a concept that's generally seen as an effective tool in reducing traffic jams.

    But installing GPS technology in cars and giving that data to the government raises a whole series of privacy concerns.

    CBO anticipated such concerns in its report.

    It said GPS technology that records a vehicle's general but not specific location could ease those concerns.

    Also, on board computers could be used to calculate the vehicle's final bill and merely transmit that information to the government, keeping the actual path of the vehicle private.

    Like the gas tax, a mileage tax would also tend to have a higher impact on people in rural areas. Rural residents tend to drive larger cars and have longer commutes.

    Those concerns have led to staunch opposition to the driving tax from some representatives of rural states.[/QUOTE]

    [url]http://money.cnn.com/2011/05/18/news/economy/gas_tax_drivers/index.htm?hpt=Sbin[/url]

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    Bullsh*t! I pay more than enough taxes when I fill up.

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    [quote]
    Because greater fuel economy is letting motorists drive more miles using less gas, the current gas tax that funds the federal government's efforts to build and maintain highways isn't generating enough money.[/quote]

    this is the key statement from the article

    there is a shortage between what highways cost and what we are paying for them... that's a fact.

    the question is what to do about it? right wingers love to say "never raise taxes" and "cut spending" but really how can we make re-paving a road cheaper? if you have a good idea (rather than just complaining about more taxes) let's hear it.

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    [QUOTE=bitonti;4035532]this is the key statement from the article

    there is a shortage between what highways cost and what we are paying for them... that's a fact.

    the question is what to do about it? right wingers love to say "never raise taxes" and "cut spending" but really how can we make re-paving a road cheaper? if you have a good idea (rather than just complaining about more taxes) let's hear it.[/QUOTE]

    Privatize the highways and let them collect tolls and maintain them like China does for the most part. Users pay.

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    [QUOTE=bitonti;4035532]this is the key statement from the article

    there is a shortage between what highways cost and what we are paying for them... that's a fact.

    the question is what to do about it? right wingers love to say "never raise taxes" and "cut spending" but really how can we make re-paving a road cheaper? if you have a good idea (rather than just complaining about more taxes) let's hear it.[/QUOTE]

    The solution would be to empower the States to deal with these issues. There are already crazy tolls in NJ for the major Thruways. I don't want to pay a tax in NYS and have the money sent to North Dakota. The Federal Govt should not be handling these types of issues.

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    [QUOTE=bitonti;4035532]....but really how can we make re-paving a road cheaper? if you have a good idea (rather than just complaining about more taxes) let's hear it.[/QUOTE]

    The reason Roadwork is as expensive as it is is due to the durabillity and tolerences required for heavy comercial use. Car traffic does not warrant the cost/level of durabillity, even in congested/heavy use areas, that we currently mandate.

    If the primary cause of the cost is comercial use, then it would perhaps be appropriate to implement a per-mile fee only on comercial users, those who are using the Roads as railroads use their own rails.

    This would go to levy the appropriate cost on the appropriate cost-generating entities, whilst limiting cost to those who use roads as a profit-maker. it would also even the playing field to some degree bewteen rail and road transporters, making heavy rail a more viable and profitable option for shippers, something good as freight rail is vastly more eco-friendly than road transports. It would also assist in road safety, as less heavy comercial use vehicles lead to safer roads for private vehicle users.

    So thats the engineering and competative facts, now on to policy/politics opinion.

    As to paying for roads, I would suggest we have an assortment of federal programs and spending that should not recieve a single dime of taxpayer money unless truly vital spending items like roads has been fully funded first. In my view, it is a crime that a road project would go unfunded, whilst a cowboy poetry rodeo would recieve even a single penny of taxpayer money.

    I will echo my longstanding position, that we have allowed our Govt. to become a catchall for everything, and hence does everything poorly, instead of keeping it limited and focussed on what public services it should be providing. Leaving entitlements aside, items such as public infrastructure are a vital item (roads, bridges as well as public transportation, the last an item that is patently unprofitable in the private sector, and yet like roads of a clear and unquestionable public benefit), and should be recieving adequate funding for need, prior to other programs of a less vital/more political nature. Science and Infrastructure, alongside defense, are some of the most vital spending our Govt. can (and should) be making.
    Last edited by Warfish; 05-24-2011 at 12:19 PM.

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    [QUOTE=bitonti;4035532]this is the key statement from the article

    there is a shortage between what highways cost and what we are paying for them... that's a fact.

    the question is what to do about it? right wingers love to say "never raise taxes" and "cut spending" but really how can we make re-paving a road cheaper? if you have a good idea (rather than just complaining about more taxes) let's hear it.[/QUOTE]

    Reduce road crews from 5 guys watching the 1 guy work down to 2 guys watching 2 guys work. Twice the work while cutting 1/3 of the costs! Granted you would have to buy twice as many shovels though.

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    [QUOTE=Warfish;4035541]
    As to paying for roads, I would suggest we have an assortment of federal programs and spending that should not recieve a single dime of taxpayer money unless truly vital spending items like roads has been fully funded first. [/QUOTE]

    it way harder to cut spending to existing projects than it is to just tack on another tax. Ideally yes the federal gov't would be audited, sensible cuts made etc. but we don't live in an ideal world. one person's wasteful spending is another person's lifeline. for the house, senate and the President to all agree that something is wasteful takes a minor miracle.

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    [QUOTE=Trades;4035651]Reduce road crews from 5 guys watching the 1 guy work down to 2 guys watching 2 guys work. Twice the work while cutting 1/3 of the costs! Granted you would have to buy twice as many shovels though.[/QUOTE]

    this is like saying if 1 woman takes 9 months to make a baby, 9 women could make a baby in 1 month! great in theory, a non starter in practice.

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    [QUOTE=bitonti;4035532]how can we make re-paving a road cheaper? if you have a good idea (rather than just complaining about more taxes) let's hear it.[/QUOTE]

    ok, here's one way. Extremely cost-effective re-paving, and gives major boners to the green crowd as well.

    [url]www.cembase.com[/url]

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    I'm dissapointed you missed the primary point of my post, re: the issue.

    [QUOTE=bitonti;4035661]it way harder to cut spending to existing projects than it is to just tack on another tax.[/quote]

    In the current political environment, with pro-tax (D) in power in 2/3's of the Govt. and the (R) being very very weak on spending cuts, yes, I fully agree.

    [QUOTE]Ideally yes the federal gov't would be audited, sensible cuts made etc. but we don't live in an ideal world.[/QUOTE]

    It is very very sad, and very informative as to the current state of the electorate and the Government it elects, that a fundamental and basic function of accountabillity is viewed by so many as a pie-in-the-sky "ideal world only" form of never-happen idealism.

    [QUOTE]one person's wasteful spending is another person's lifeline.[/QUOTE]

    Vital and non-Vital are not, as you imply, so difficult to tell apart objectively. I specificly left out entitlement programs in my reply for that very reason.

    So, as you see it, not only is any accountabillity/auditing an impossible pipe dream, but basic-level prioritization (A is more vital than B, B more vital than D, etc.) is also beyond the abillity of our current system of Governance.

    [quote]for the house, senate and the President to all agree that something is wasteful takes a minor miracle.[/QUOTE]

    It appears this is your answer to any and all issues we discuss here other than "raise taxes".

    You asked for a solution, I provided you one in the first half of my reply, and it was entirely ignored. You'll have to forgive me if I find that a wee bit irritating.

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    They should get rid of specific taxes for specific government functions. Roads should be part of the federal budget with funds comming out of the general budget or they should privatize them. Either maintaining Interstate roads are a prime function of the government or they aren't.

    You could argue that people should pay a road use tax when they buy something at the grocery store, it traveled over the road to get to the supermarket.

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    [QUOTE=bitonti;4035662]this is like saying if 1 woman takes 9 months to make a baby, 9 women could make a baby in 1 month! great in theory, a non starter in practice.[/QUOTE]

    Actually it was a joke but you are telling me that having 2 people work on the same job to get it done quicker is an impossibility?

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    [QUOTE=Warfish;4035541]The reason Roadwork is as expensive as it is is due to the durabillity and tolerences required for heavy comercial use. Car traffic does not warrant the cost/level of durabillity, even in congested/heavy use areas, that we currently mandate.

    If the primary cause of the cost is comercial use, then it would perhaps be appropriate to implement a per-mile fee only on comercial users, those who are using the Roads as railroads use their own rails.

    This would go to levy the appropriate cost on the appropriate cost-generating entities, whilst limiting cost to those who use roads as a profit-maker. it would also even the playing field to some degree bewteen rail and road transporters, making heavy rail a more viable and profitable option for shippers, something good as freight rail is vastly more eco-friendly than road transports. It would also assist in road safety, as less heavy comercial use vehicles lead to safer roads for private vehicle users.
    [/QUOTE]

    warfish I didn't mean to neglect this part of your answer... it was quite good... i guess the question becomes one of enforcement... and even tho rail is a competitor it doesn't have the capacity to replace all trucks.

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    [QUOTE=Trades;4035744]Actually it was a joke but you are telling me that having 2 people work on the same job to get it done quicker is an impossibility?[/QUOTE]

    it depends on the job

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    [QUOTE=bitonti;4035842]warfish I didn't mean to neglect this part of your answer... it was quite good... i guess the question becomes one of enforcement... and even tho rail is a competitor it doesn't have the capacity to replace all trucks.[/QUOTE]

    Enforcement is easier if the added costs (tax) is applied comercially. Falls under regulatory requirements. A "mile-o-meter" isn't hard to install, and it's a much easier implementable in Comercial Vehicles than personal. Also skips the "privacy" issue, as Comercial use is not private per se.

    As for Rail, it has the capacity (and upgradeabillity) to handle all long-distance work. The reason longhaul trucking is cost effective today vs. rail, is trucks do not pay for or own their routes, the taxpayers cover that.

    Simplification of course (the real deal would take up a books worth of discussion on the details of shipping, rail, and trucking industries), but it's accurate in generality.

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    We subsidize subways, buses and all other transport but highways are a no no! How about the riders of the buses subways pay the full fair!

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    [QUOTE=Warfish;4035669]
    It is very very sad, and very informative as to the current state of the electorate and the Government it elects, that a fundamental and basic function of accountabillity is viewed by so many as a pie-in-the-sky "ideal world only" form of never-happen idealism.

    [/QUOTE]

    let me just revisit this comment and say dont forget about the will of the voters

    GOP are finding out the hard way that voters like the idea of a balanced budget but they recoil at any cuts that affect them. The Medicare issue has been dogging the party and basically lost them that race in upstate NY.

    [url]http://content.usatoday.com/communities/onpolitics/post/2011/05/congress-special-election-medicare-/1[/url]

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    [QUOTE=MnJetFan;4036064]We subsidize subways, buses and all other transport but highways are a no no! How about the riders of the buses subways pay the full fair![/QUOTE]

    Because they would never pay it. Most mass transit operations are lucky to get back ~45-55% of operations costs (just operations) from fare collections. The rest of operations, and all of capital improvements, comes from subsidy of one form or another, State and Local, or Federal.

    The reason is that jurisdictions see mass transit as a pure public service. It is not, nor can it, ever be a viable private sector for-profit enterprise. History proves than a dozen times over. It's either a public service, r you o not have it. There is no option 3 on this one.

    Now, we can debate the value or need of offering that service (I tend to be pro-transit), but that is a seperate issue than the way is it subsidized discussion.

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    [QUOTE=bitonti;4036072]let me just revisit this comment and say dont forget about the will of the voters[/quote]

    We could have a ten page debate on this aspect. Not that the "will of the voters" is irrelevant, as I agree with you it is quite relevant as you lay out, but more in how we allowed ourselves to get to such a point, and why it would be utterly vital to get away from a poit where >50% of the voters pay no net income taxes, but can vote in politicians who will repay them by continuing irresponsible, deficit-and-debt-fueled fiscal policies in order to maintain political power.

    [QUOTE]GOP are finding out the hard way that voters like the idea of a balanced budget but they recoil at any cuts that affect them. The Medicare issue has been dogging the party and basically lost them that race in upstate NY.[/QUOTE]

    Yes, that is the current Democrat Party line on this election. However, I tend to agree that the defeat was far more likely caused by a supposed "Tea Party" candidate (who was nothing of the sort btw) taking away 9%+ of the vote from the (R) Candidate. That, and the (R) spin is that the (R) running was pretty horribad as well.

    If we're having an honest discussion on Medicare, it must always be reminded that any changes supported by (R), or any change I'd be willing to support, would not effect current benefit recipients, but would be a phased in change over a period of many years, and would not start effecting folks till down the road (folks who are 50 or even 55 now), or would be (lol) progressive, i.e. the amount of benefits change based on your need for them.

    The (D) side has made much political hay out of the inaccurate claim that "(R) wants to end your Medicare today!". It's dishonestly such as that that I find so abhorant to finding actualy beneficial changes to programs that appear doomed to debt and deficit without reform. And yes, the (R) have done plenty of that as well, especially on Healthcare.

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